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Virtual Economics

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Unit 6: Lesson 15 - Halloween Treats and Nonrenewable Resources
Economics and the Environment
Students are introduced to the "when" question with a Halloween variation of the "cake-eating" problem. The snacks described in the problem are then used to demonstrate how a market for a nonrenewable resource works.
Grade(s): 9-12
Concepts: Nonrenewable Resources, Assets, Interest Rate, Price, Rate-of-return, Capital Gain,

Lesson 6 - What Is a Bond?
Learning, Earning and Investing: High School
In this lesson the students learn what bonds are and how bonds work. They learn the basic terminology related to bonds and participate in a simulation activity aimed at showing that bonds are certificates of indebtedness, similar to an IOU note. Finally, the students explore credit ratings and calculate average coupon rates for various bond ratings in order to determine the relationship between ra...
Grade(s): 6-8, 9-12
Concepts: Bond, Bond rating, Coupon, Coupon bond, Coupon rate, Default, Face value, Maturity date, Par value, Risk, Zero-coupon bond

Lesson 12 - Building Wealth over the Long Term
Learning, Earning and Investing: High School
The students are introduced to the case of Charlayne, a woman who becomes, accidentally, a millionaire. Charlayne's success, the students learn, was unexpected, but not a miracle. It can be explained by three widely understood rules for building wealth over the long term: saving early, buying and holding, and diversifying. The lesson uses Charlayne's decisions to illustrate each of these rules. It...
Grade(s): 6-8, 9-12
Concepts: Compound interest, Diversification, Forms of saving and investing, Reward, Risk

Unit 7: Lesson 1 - Whatdunit? The Great Depression Mystery
United States History: Eyes on the Economy - Through the 20th Century
Students read a brief passage posing the basic question about the Great Depression: How did it happen? A brief simulation activity shows how unemployment in one part of the economy can lead to unemployment in other parts of the economy. With the aid of two visuals, the teacher discusses the reduction in the stock of money caused by bank failures from 1930 to 1933.
Grade(s): 9-12
Concepts: Recession, Depression, Demand, Income, Multiplier, Money, Fractional reserve banking, Federal reserve system,

Lesson 14: Borrowing decisions and expected returns
Master Curriculum Guide: Economics and Entrepreneurship
Entrepreneurs must possess or have access to funds to start their businesses. They may use their own funds; get others to give them funds for a share of the business and claims on future profits (equity financing); or they may borrow money from others (debt financing) with the contractual obligation to pay back the amount of money borrowed plus additional dollars called interest payments.
Grade(s): 9-12
Concepts: Interest, Interest Rates, Investment, Expected Returns,

Theme 4: Lesson 11 - What Is Credit?
Financial Fitness for Life: Bringing Home the Gold - Grades 9-12 - Teacher Guide
Credit decisions are among the most important choices that young people will make. This lesson provides an overview of what credit is and some of the advantages and disadvantages of using credit. Students examine various types of loans including home mortgages, car loans, college loans, personal loans, and credit card loans.
Grade(s): 9-12
Concepts: Credit, Risk, Interest

Lesson 7 - What Are Mutual Funds?
Learning, Earning and Investing: High School
The students form class investment clubs that work much in the way mutual funds do. They invest $3,000 (300 shares at $10 a share) in up to six stocks. One year later they revalue their shares and determine whether a share in their class investment clubs has increased or decreased in value. Finally, they read about mutual funds and learn that the concept behind mutual funds is similar to the conce...
Grade(s): 6-8, 9-12
Concepts: Diversification, Liquidity, Load, Mutual fund, Net asset value, Risk and reward

Lesson 23 - Investing Involves Decision Making
Learning, Earning and Investing: High School
This lesson provides an overall review and an opportunity for students to apply many of the concepts stressed in earlier lessons. The students examine different sorts of risk that come with investments. They are introduced to a fivestep decision-making model. After practicing with it, they apply the model in a simulation activity in which they act as financial advisors, offering financial advice i...
Grade(s): 6-8, 9-12
Concepts: Bonds, Capital gain, Certificate of deposit, Dividend, Diversification, Liquidity, Money market account, Mutual funds, Principal, Rate of return, Risk, Savings account, Stocks

Lesson 14 - Savings and Personal Investments: If You're So Smart, Why Aren't You Rich?
Personal Decision Making: Focus on Economics
Students view a transparency showing the difference between economics definitions and personal finance definitions of the terms capital and investment. They read and discuss a handout listing four basic rules for wise investment decisions.
Grade(s): 9-12
Concepts: Capital, Investment, Savings, Opportunity cost, Securities, Stocks, Bonds, Mutual funds, Savings accounts, Certificates of deposit, Risk versus return, Liquidity,

Lesson 16 - What We've Learned
Learning, Earning and Investing: High School
This lesson features a game in which the students review key vocabulary words and concepts presented in earlier lessons. The game is called Flyswatter Review. The teacher divides the class into two teams. Using transparencies, the teacher projects financial terms from the visuals onto a screen or wall. The teams compete to select the correct definition.
Grade(s): 6-8, 9-12
Concepts: Stock Market, Stock, Mutual Fund, Risk, Liquidity, Liquidity Risk

Lesson 2 - Investors and Investments
Learning, Earning and Investing: High School
In this lesson the students explore different types of investments, some of which are unconventional, in order to grasp the basic idea that investment involves trading off present benefits for future satisfaction. The students also apply the criteria of risk, return and liquidity to define more precisely the meaning of investing.
Grade(s): 6-8, 9-12
Concepts: Investing, Investment, Liquidity, Return, Risk

Unit 6: Lesson 3 - The Federal Reserve System is Established
United States History: Eyes on the Economy - Through the 20th Century
The teacher shows a visual that demonstrates how reserves of small, medium size and large U.S. banks were interrelated in the 19th century. The teacher distributes a handout that demonstrates how many panics spread throughout the U.S. banking system. Students use two handouts that explain how the establishment of the Federal Reserve System reduced the problems of bank failure and the money panic...
Grade(s): 9-12
Concepts: Money, Fractional reserve banking, Bank reserves,

Lesson 21 - Lessons from History: Stock Market Crashes
Learning, Earning and Investing: High School
The students analyze information about the stock market crash of 1929 and the stock market crash of 1987. They use the information to make posters about the crashes, highlighting what happened during and after the crashes, causes of the crashes and the role of the Federal Reserve in each crash. After presenting their posters to the class, the students discuss similarities and differences between t...
Grade(s): 6-8, 9-12
Concepts: Causes and effects of the stock market crash of 1929, Causes and effects of the stock market crash of 1987, Federal Reserve, Monetary policy, Supply and demand

Unit 3: Lesson 16 - Making Choices About Saving and Investing
Capstone: Exemplary Lessons for High School Economics - Teacher's Guide
This lesson introduces the distinction between savings and the investment. It demonstrates how the price of money --the interest rate--is critical to making the right savings and investment choices. It explains when, under various conditions, it is or is not in people's best interest to save.
Grade(s): 9-12
Concepts: Choice, Inflation, Interest, Investment, Loanable funds market, Purchasing power, Real interest, Savings

Lesson 12 - Fiscal Policy: A Two-Act Play
Economics in Action: 14 Greatest Hits for Teaching High School Economics
Groups of students are given outlines for one of two acts in a play describing either expansionary or contractionary fiscal policy. After the students choose parts and prepare lines for their roles, two groups are chosen to perform the play. Students then discuss the events in the play using a Visual that defines concepts related to fiscal policy. More advanced classes may then discuss current deb...
Grade(s): 9-12
Concepts: Contractionary fiscal policy, Expansionary fiscal policy, Fiscal policy, Multiplier effects, Supply-side fiscal policy, (Optional) Crowding out

Lesson 8: Central Banking With or Without Central Planning
Focus: Economic Systems
Students participate in an auction to see how large increases in the money supply can cause inflation. Then they examine data on the relationship between inflation and growth rates in the money supply in different countries. That leads to a discussion of central banks and monetary policy. Finally, students plot a scatter diagram to investigate the relationship between the political independence...
Grade(s): 9-12
Concepts: Inflation, Monetary Policy, Central Bank

Lesson 22 - Investing Internationally: Currency Value Changes
Learning, Earning and Investing: High School
The students examine the costs and benefits of international investing. They study the case of an investor named Lizzy who buys shares in a European mutual fund. Lizzy is surprised to learn that, while her international investment earned an excellent return in euros, she still lost money. How could that happen? Lizzie learns that the answer lies in understanding how changes in international curren...
Grade(s): 6-8, 9-12
Concepts: Currency markets, Demand for currency, Diversification, Exchange rate, Supply of currency

Lesson 17 - How Financial Institutions Help Businesses Grow
Learning, Earning and Investing: High School
The students read two case studies about the financing of businesses, contrasting modern approaches with approaches from the 1870s. Using transparencies, the students discuss the advantages of the corporate form of business organization over sole proprietorships and partnerships, while also discussing modern financial institutions that help American business firms grow.
Grade(s): 6-8, 9-12
Concepts: Bond, Corporation, Federal Reserve System, Investment bank, Limited liability, Partnership, Sole proprietorship, Stock, Venture capital

Macroeconomics Unit 4: Lesson 5 - The Money Market and Monetary Policy
Advanced Placement Economics: Teacher Resource Manual
In this lesson, the demand for and supply of money are brought together in the money market. The effects of the Federal Reserve System's monetary policy are integrated into the money market and then linked to aggregate demand. The lesson then discusses the resulting impact on equilibrium output and price level. In Activity 39, the students practice manipulating the money market and understandin...
Grade(s): 9-12
Concepts: Transactions demand for money, Precautionary demand for money, Speculative demand for money, Liquidity,

Lesson 19: Financing the Entrepreneurial Enterprise
Entrepreneurship in the U.S. Economy: Teacher Resource Manual
In this lesson, students will explain why entrepreneurs need adequate financing to be successful; identify possible sources of financing for entrepreneurs; cit factors that influence the cost of financing an entrepreneurial enterprise; compare alternative methods of financing and entrepreneurial enterprise; evaluate alternatives for financing an entrepreneurial venture and decide which alternative...
Grade(s): 9-12
Concepts: Credit worthiness, Debt, Fixed interest rates, Flexible interest rates, Prime interest rate, Federal Reserve System, Equity

ONLINE LESSONS:

online Buy and Hold: A Stock Market Simulation
Students will participate in a brief activity as well as direct instruction that explains the purpose of stocks and bonds from both a corporate and investor perspective. Then they will work in groups to make investment decisions in a structured stock market game set in January 2000. Students will analyze the performance of their investment portfolios over a decade and evaluate their gains and loss...
Grade(s): 9-12
Concepts: Firms,Bond,Dividend,Rate of Return,Stock,Corporation

online Earning Credit
Students participate in a series of activities that provide them with a simulated credit score and an auto loan interest rate based on their credit score. Then they learn to use compound interest and amortization schedules to calculate the real cost of buying a car, and they compare the total cost of buying a car for individuals with high and low credit scores. At the conclusion, students have a s...
Grade(s): 9-12
Concepts: Credit,Interest Rate,Risk,Compound Interest,Credit Report,Principal,Simple Interest

online A Penny Saved
Students will read the comic book, "A Penny Saved" published by the New York Federal Reserve Bank. Students will make the information relevant through projects, graphic organizers, teacher instruction, and problems.
Grade(s): 9-12
Concepts: Interest Rate,Saving,Compound Interest,Savings,Savings Account,Rule of 72,Required Reserves

online It's a Not So Wonderful Life
In this lesson students learn about banks and banking. The study the fractional reserve system, and the role the Fed plays in the money creation process.
Grade(s): 9-12
Concepts: Banking,Central Banking System,Money Supply,Supply,Money,Savers

online The Early 1980s: A Tough Time For Home Builders and Mortgage Bankers
Have you ever thought of how much it might cost you to finance the purchase of a home? The home's purchase price is likely to be many times the yearly income of the typical household. If families waited until they had accumulated enough savings to use cash to pay for a home, they would be denied the benefits of homeownership for many years. Instead, most families go to a mortgage banker o...
Grade(s): 9-12
Concepts: Banking,Credit,Federal Reserve Structure,Housing,Inflation,Interest Rate,Mortgage,Deflation,Federal Reserve

online Economic Indicators
How do economists make their forecasts about the U.S. economy? What are the economic indicators that help forecast economic activity and business cycles? In this lesson you will be able to retrieve up-to-date, key economic statistics which will provide valuable hints about the state of the future economy.
Grade(s): 9-12
Concepts: Consumer Economics,Gross Domestic Product (GDP),Money Supply,Price,Production,Stock Market

online President Jackson and the Veto of the Second National Bank
ESSENTIAL DILEMMA Could the conflict over the Second National Bank have been resolved in a way that supported the values advocated by both President Jackson and Congress?
Grade(s): 9-12
Concepts: Money Supply,Definition of Money,Monetary Policy,Money,Risk,Government Failure,Market Failures,Bank,Fraud Risk,Paper Money,Characteristics of Money

online The Economics of the New Deal
The stock-market crash of 1929 is generally seen as the start of The Great Depression, the worst economic downturn in the history of the United States. The Depression had devastating effects on the country. But it also served as a wake-up call for economic reform. Until the Great Depression, the U.S. government had made very few modifications to the nation's economic policies. It left the dealings...
Grade(s): 9-12
Concepts: Role of Government,Fiscal Policy,Monetary Policy

online Your Credit Card
Students will compare credit cards by looking at the amount of interest they will incur when paying off the balance on their purchases. Students will discuss times when they will need to use a credit card, rewards programs, and disadvantages of the use of plastic.
Grade(s): 9-12
Concepts: Decision Making,Incentive,Costs,Credit Card,Finance Charge

online Loan Amortization - Mortgage
How to amortize a loan using an Excel spreadsheet.
Grade(s): 9-12
Concepts: Interest Rate,Mortgage,Interest,Compound Interest,Debt,Financial Planning,Annual Percentage Rate (APR),Principal

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